How To Use Barriers To Land Profitable Trades In The Forex Markets

by Jared Passey
To learn the ways in which traders can determine areas where many barriers are can make a trader a good profit. Many kinds of cost barriers are in the FX market. It is ordinary for currency pairs to change direction at these barriers. When traders learn the ways they can put them together, traders may create a system of trading with higher probabilities of success. A few barriers contain resistances levels, support levels, Fibonacci levels and psychological barriers. Barriers on trend lines and at pivot points can also enhance our observation. Now we will examine the various kinds of barriers that are common in the Forex market.Support and Resistance LevelsSupport and resistance levels are huge turning points that the market has consistently respected in the past. When the market respects them more, then they become stronger Support is identified as the turning point where the buyers put themselves at the top which made the currency pair go up. Resistance is any level where the market finished rising and turned down. Support and resistance levels on larger time charts are considered more significant than those on smaller time chartsPsychological BarriersPsychological barriers are identified as huge numbers. Any numeral ending in 50 or 00 is a significant barrier. Any number ending with 000 is more significant. You will be in wonder at how much a currency pair exhausts itself and turns within a few pips of a psychological barrier.Fibonacci LevelsFibonacci lines are frequently used to determine if a point has the potential to reverse. Begin with your larger time charts and make Fibonacci lines on major moves. Drill down and mark all smaller moves. See where the Fibonacci lines, psychological barriers and support and resistance lines match.Trend LinesMake trend lines to put a mark on all major moves and then work your way down to smaller trends. If you ever run into trend lines that go in the same direction, mark them. To do this, put lines along the lowest points of an upward trend and along the tops of a downward trend.Pivot PointsMost charting packages have either a calculator or a tool that plots your points where it can pivot. These are areas where the currency pair is likely to turn. Most tools and calculators offer several numbers both below and above the current levels of the currencies you are following.Drawing lines to mark the various barriers that we always encounter in the foreign currency market can aid us in identifying where a pair is likely to turn. Take note of those levels where multiple barriers correspond. This increases the chance of having success while trading.If you have many barriers that connect at a certain point, then it is very significant To find out more information about these barriers and their application on your charts, check out our website .About the AuthorJARED PASSEY has worked with hundreds of forex traders, has created several successful strategies, trades professionally AND manages a foreign exchange fund. He loves helping traders and holds a free weekly online forex trading club. (You may reproduce this entire article on your site only if the above link is intact.)